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Five-story hotel takes shape

Closed-door negotiations to change the face of downtown San Luis Obispo will see the light of day for the first time on July 18, when the city council decides whether to approve an exclusive agreement for a massive hotel complex known as the Garden Street Terraces.

Culminating 10 months of confidential meetings, the cityâ€™s agreement with WestPac Investments Inc. â€œwill serve as a roadmapâ€? during the development review process for the huge project, according to a staff report.

WestPac is proposing to redevelop the city block bordered by Broad, Marsh, Garden Street, and Garden Alley. The agreement states that the developmentâ€”â€œas presently conceivedâ€?â€”includes a 70-room hotel with a bar, restaurant, gym, and 2,500-square-foot conference area; 50 residential units ranging from 650 to 1,500 square feet; 18,000 square feet of ground-floor retail and commercial space, 40 metered parking spaces, and underground parking for residents and hotel guests.

Under the agreement, the city wouldnâ€™t exactly sell its parking lot to WestPac, but would instead own the air space for 96 parking spaces. However, WestPac is asking the city for help â€œto manage its cash flow,â€? with an â€œadvanceâ€? of $2.4 million paid to WestPac by the city, to be repaid over 30 years.

The city-owned parking lot was appraised at $5 million, but in the agreement, the land value is set at just $2 million due to â€œburdening factorsâ€? such as requirements for parking.

According to a staff report, the project would help accomplish the cityâ€™s goal of increasing sales tax and transit occupancy tax.

The item is the first agenda item for the July 18 meeting, which starts at 7 p.m. in the city council chambers on Palm. âˆ†